MEMPHIS, Tenn., May 25, 1999 - Promus Hotel Corporation
(NYSE: PRH) announced today that it has lowered its earnings expectation
for 1999 as a result of softening market conditions, repositioning actions
of the Doubletree brand and deteriorating performance of Red Lion related
hotels. The Company remains committed to the implementation of aggressive
repositioning actions which are expected to improve the overall product
quality and consistency of the Doubletree hotel brand, re-establish the
Red Lion Inns brand as a more competitive brand in the Northwest and reposition
INNCO (its purchasing subsidiary) for accelerated growth. The Company also
indicated that its previously announced efforts to dispose of a portion
of its real estate portfolio have been advanced by a preliminary agreement
to sell $124 million of Homewood Suites hotels.

Promus now anticipates its 1999 EPS growth rate to be in the mid-single
digits. Previously, Promus had expected EPS growth to be in the mid-teens
range for 1999.

Norm Blake, Promus Hotel Corporation's Chairman, President and CEO said,
"In the current softening market conditions, we are seeing slower revenue
growth than had been anticipated for this year. Growth in revenue per available
room (RevPAR) has slowed in the key industry segments in which all of our
brands compete and we now anticipate that 1999 growth rates will probably
be only one to three percentage points. This represents one to two percentage
points below our previous expectations for 1999. In addition, delayed openings
of hotels in 1998 and 1999 and the associated delay in reaching stabilization
have contributed to slower revenue growth."

Norm Blake continued, "The new senior management team is moving forward
with the recently initiated strategy to narrow the focus and raise the
bar on the Doubletree brand's overall product quality. As a result, at
least 29 Doubletree hotels are expected to be re-flagged over the balance
of 1999 and 2000. Those hotels either are not in appropriate markets or
do not have the acceptable product quality to measure up to Doubletree
standards. An estimated ten to fifteen hotels may leave the Promus system
as a result of the Doubletree repositioning strategy, with the remainder
expected to be converted to Red Lion Inns."

The Red Lion Inns brand was not aggressively marketed following the
Doubletree acquisition as the Company focused on converting Red Lion Inns
to Doubletree hotels. Promus is now investing to reposition Red Lion Inns
as the dominant regional brand in the Northwest. Performance is anticipated
to improve for these hotels as quality is improved and additional Red Lion
hotels are added to the system. New franchising programs are being established
to promote future earnings growth.

Doubletree repositioning actions have also contributed to slower growth
of this management contract oriented brand. In the past, Doubletree had
grown rapidly from corporate mergers and acquisitions and conversions of
individual hotels into the Doubletree system. With the advent of the capital
markets tightening, the growth in the Doubletree brand has been slower
than anticipated. Until such time as Doubletree's market positioning can
be clearly defined, fewer Doubletree conversions are anticipated.

INNCO's purchasing and service fees have not realized the growth anticipated
due to lower project management fees associated with Doubletree conversions.
As the number of conversions have decreased, so have purchasing and service
fees. In addition, while preferred vendor business continues to grow, the
rate of growth has slowed following last year's rapid expansion as a result
of the merger.

Norm Blake said, "1998 was a difficult year for Promus. As a result
of the distraction created by integration activities following the merger,
focus on growth initiatives suffered in 1998. It has now become more apparent
that this unfortunate distraction has impeded our short-term growth. The
new management team is going to accelerate the tempo in regaining lost
momentum and making disciplined decisions about new growth opportunities.
As we go about this repositioning, we will see slightly higher GA for the
remainder of 1999 and 2000. We will honor the past and build upon Promus'
past successes, but will strive to make the new Promus even better. The
fruits of the initiatives that we are now undertaking will give Promus
greater long term growth potential. 1999 and 2000 will be challenging for
Promus as we attack some tough issues in a softening market and position
the Company for much stronger and reliable growth. I am very excited about
our brands, our people and the quality of our balance sheet. I personally
look forward to this opportunity to make a great company and its brands
even better."

Consistent with the previously announced real estate disposition strategy,
Promus has entered into a letter of intent to sell thirteen of its Homewood
Suites hotels to a Mid-Atlantic based real estate investment concern that
is expanding its product base into the upscale extended-stay hotel market.
The sale will anchor the beginning of a strategic partnership between the
two groups that could grow to a $600 million level over the next five year
period. It is anticipated that the initial thirteen properties, with an
estimated value of approximately $124 million, will close by the end of
the third quarter 1999. As part of the strategic partnership, Promus is
expected to sell newly developed and stabilized Homewood Suites hotels
to the real estate concern. Promus will enter into long term management
and franchise agreements as the hotels are sold to its newest business
partner.

The expected growth rate, number of hotel additions or losses, impact
of repositioning actions, purchasing and service fees, RevPAR growth rates
and other matters discussed in this press release may constitute forward-looking
statements within the meaning of the federal securities laws. Such statements
are based on management's beliefs, assumptions and expectations, which
in turn are based on information currently available to management. Actual
performance and results could differ from those expressed in, or contemplated
by, the forward-looking statements due to a number of risks, uncertainties
and other factors, many of which are beyond Promus' ability to predict
or control, including changes in the general economy, customer demand,
interest rates and competition. Promus disclaims any obligation to update
any such forward-looking statements or underlying assumptions. For further
information on factors which could impact Promus and the statements contained
herein, we refer you to the filings made by Promus with the Securities
and Exchange Commission, including current reports on Form 8-K, quarterly
reports on Form 10-Q and annual reports on Form 10-K.

Promus
Hotel Corporation is the franchiser/operator of the Doubletree Hotels,
Doubletree Guest Suites, Embassy Suites, Hampton Inn, Homewood Suites,
Hampton Inn Suites, Club Hotel by Doubletree, Red Lion, Embassy Vacation
Resort and Hampton Vacation Resort brands. The Company also manages non-
Promus branded hotels and facilities in its University Hotel Conference
Center division. The Company operates, franchises or owns hotels throughout
the United States and in Canada, Mexico and Latin America. Promus is headquartered
in Memphis, Tennessee and has approximately 40,000 employees.